Andhra government plans to develop three new mega cities and 14 smart cities

India is on the cusp of an unprecedented wave of urbanisation. To cope with this wave, we need to be open-minded about solutions. Building new cities from scratch is one answer. Let’s start with what awaits us. Our urban population today is about 377 million or 31% of the total. By 2031, it is projected to rise to 600 million. Existing cities are being choked by ongoing waves of urbanization, led by migration from rural areas. Their infrastructure is creaking and unable to cope. Therefore, building new cities may well become a compulsion and not remain a fantasy.

Between Census 2001 and 2011, India witnessed a spurt of urban clusters, with the number of towns increasing from 5,161 to 7,935 in a decade. Most of the new towns are agglomerations that grew in rural and peri-urban areas with practically no infrastructure or urban governance structures. Simply put, the cold reality is urban agglomerations are expanding fast even as we debate the wisdom of creating cities. Recognising reality will allow for a more orderly expansion and provide people with a better quality of life. That is the real choice we face as urbanisation is now an unstoppable force.

India’s future prosperity depends on its urban centres, which already contribute a little over two third of GDP. Creation of new cities need not be as expensive as people imagine. There are options to make it affordable such as different kinds of land pooling arrangements that have been tried earlier. New cities can also be contained in smaller spaces by enhancing Floor Space Index (FSI), which sets the rate of substitution between capital and land. In the manner of cities elsewhere, India can easily enhance FSI to mitigate problems related to acquiring land. New cities are the future.

The Andhra Pradesh government’s decision to build three new mega-cities as well as 14 smart cities is specious. The state lacks the resources to fulfil this overly ambitious plan; neither can it depend entirely on Central transfers. A smarter move is to expand existing large cities rather than build anew. The fact that CM Naidu failed to specify the exact location of the new cities points to the dilemma he faces. The only outcome will be wild speculation leading to land prices rocketing in many areas. This will only benefit the political class who have inside information on the final location of large projects.

Then there are larger questions about diversion of rich agriculture lands for which the Vijayawada region is most famous, and where the new capital of Andhra is slated to come up. New land acquisition laws require that the landowners have to be compensated at very high rates for the land acquired. The cost of acquiring vast contiguous areas for new cities will therefore be prohibitive. A fledging state like Andhra Pradesh can ill afford this, especially since most of the financial resources remain concentrated in Hyderabad. This would force the new state to roll out a very staggered construction plan for the new capital which is politically risky given the urgent need to shift the bureaucracy out of Hyderabad at the earliest.

If there was an absolute need to build a greenfield capital for Andhra Pradesh it would have been better to locate it on a huge expanse of waste land. Building a large city on the rich agriculture land in Vijaywada region is not only misuse of limited resources but also a wasted opportunity to make innovative use of fallow land in a more backward and neglected region, which would also cost much less in financial terms.